Silver foreign policy towards Argentina

This past week saw the newly elected Argentine head of state, Néstor Kirchner, make his pilgrimage to Washington. It was a state visit ahead of the original schedule, one in which, by most accounts, he did fare quite well. Kirchner ended his trek confident of having America’s unrestricted and unconditional support in his quest to revive his country’s economy.

It was Kirchner’s turn to be received at the White House and given “his thirty minutes.” Some may view this length of time as a minor league treatment for the president of a nation with a vast untapped potential, a potential that regrettably has been waiting to bloom for almost a century. Nonetheless, the representative protocol was all there: Powell, Rice, Snow and Zoellick. And the length of time rationed for this meeting, in and of itself, had little bearing on the substance of the meeting, and what’s more important, the possible outcomes which may sprout from it.

According to Argentine sources, Bush told Kirchner “we are very much alike. You and I have done things that the establishment would not have imagined us capable of doing.” Bush commended his Argentine counterpart for the way he was combating the problems of a nation with a bankrupt economy which has put over one-third of its citizens in poverty, and incited him to give his all in the forthcoming negotiations with the IMF, so as to get the South American nation on a path to economic recovery.

Whether it was the “the magic” of the Oval office, what Bush said, or how he interpreted what transpired in this state visit, Kirchner was quite content, almost ebullient, on both personal and stately levels after this get-together with the American head-of-state. One could conclude there was discernible chemistry between the two presidents.

As important as this visit was for American diplomatic relations, not just with Argentina but all Latin America , nothing of note on this subject appeared in the printed press of the United Sates, save what was written in the Washington Post. Coverage by the broadcast media was expected to be light or non-existent given the media’s treatment of the viewing and listening public which is judged to prefer entertainment containing the banality of the day, week or month… in this particular case, the indictment of a celebrity basketball player, Kobe Bryant, on rape charges. At best, Kirchner could hardly aspire to anything much beyond making the news at PBS.

Three things have occurred within the last sixty days which are not only important to Argentina, but also affect how American economic and political influence is viewed in emerging and developing countries. Two months ago, Kirchner assumed the reins of a country in a total state of disrepair, where the economic model, patterned after that of the United States, had failed. Then, a month ago, Rep. Jim Saxton, (R) New Jersey, vice-chair of the Joint Economic Committee, presented a comprehensive report to Congress as to the reasons for the debacle in Argentina. Now, it is Kirchner’s trip, and a way to seek both better relations with the United States and a way for Argentina to emerge from the mess it finds itself in.

To put everything in its proper perspective, Argentines, when seeing their country economically implode, came up with myriad reasons for the debacle. Many of these reasons were conspiratorial in nature, others possessed some economic legitimacy. Most popular among those making the rounds in the national public debate were: overvaluation of the peso (rate of exchange); corruption at all level of business and government; indiscriminate liberalization of the economy; the foreign debt being too high; and the national and provincial expenditures allowed to get out of control.

However, none of the reasons at the forefront of the debate was causal to the debacle; intervening, yes, but not causal. Not according to the detailed report presented by Saxton, “ Argentina’s crisis: causes and cures.” The report, signed and presented by Saxton, is attributed to Kurt Schuler, who together with Steve Hanke proposed the dollar-standard for Argentina as late as April 2002, when the ship was already taking large quantities of water, and irremediably sinking.

Forty-nine pages of well presented materials, interpretations and conclusions, backed by solid research and sound reasoning- an additional seven pages of source documentation ([link=http://www.house.gov/jec/imf/06-13-03.pdf]www.house.gov/jec/imf/06-13-03.pdf[/link]) made this a report of unbiased reliability. Bottom line to the problem, following the strong arguments found in the report: Argentina faced adverse external conditions in the international economic stage during a four-year period (1998-2002) that were not appropriately met by Menem’s government, or those of De la Rúa and Duhalde which followed. The report strongly opposes the view of making convertibility as the culprit for the collapse, a view adopted by the current Economic minister, Lavagna. The ultimate culpability in this crisis, which Otto Reich, Undersecretary of State for Latin America, characterizes as having caused an economic depression more than twice as bad as the United States’ Great Depression of the 30’s, is not a failure in the workings of a market economy. The failure, according to the report, was in the people who governed, and who placed personal political ambitions, and the interests of their friends, in a higher priority status than the people they were expected to serve.

The conclusions drawn in the report, published extensively in the Argentine media, seem to be gaining wide acceptance, freeing the United States from a frenzied blame and almost total culpability.

At a time when the Bush administration seems to be committing blunder after blunder, in both the domestic and international fronts, the approach taken to handle the crisis in Argentina bodes well for both diplomacy and trust. Which brings a new and interesting alternative to achieve success…instead of allowing to be influenced by the neo-conservative group around him, which is proving to be a sorry collection of malefic Keystone cops, perhaps Bush should listen to his instincts and act from the heart.

For once, there is a ray of hope in seeing America’s right-to-the-right leader march in cadence with a head of state from the moderate left.